SOUTH AFRICA: LA Group Cuts Retail Investment
South African apparel and footwear distribution giant LA Group is reducing its investment in the retail clothing market, according to its interim financial results.
The announcement came as part of the group's report, which showed a drop in operating profit for the six month period of R6.3 million year on year, in spite of a 6 per cent increase in turnover during the period.
Group managing director Showkat Mukadam said that the fall must be seen in context of the R13.9m loss attributed to the retail division as it is now accounted for as a discontinuing operation.
The company's interim results show the retail operations as a discontinuing
operation. Mr Makadam said that a concerted effort is currently being made to finalise LA Group's disinvestment in the retail sector.
Two stores have already been franchised, and the group hopes to finalise the process of franchising or disposing of others by no later than the start of the next financial year.
He added that the disposal of the direct retail chains allow LA Group management to focus more of their energy on their better performing corporate clothing and branded distribution operations.
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